Retail inflation surged to 6.09 per cent in October, breaching the Reserve Bank’s upper tolerance limit for the first time in two years and prompting economists to anticipate a policy rate hike by the RBI next month.
The Consumer Price Index (CPI) based retail inflation rose to 5.54 per cent in September, as a sustained uptick in food & beverages (F&B), restaurant services and transport inflation played a key role in pushing up the October headline number.
Data released by the Ministry of Statistics & Programme Implementation showed that food inflation spiked to 8.94 per cent in October from 7.74 per cent in the previous month. Of the 12 categories, including food items and services, 11 showed hardening in inflation. Retail inflation in restaurant and accommodation services was 10.06 per cent, F&B was 8.51 per cent, and personal care and miscellaneous goods and services were at 10.14 per cent. The top five items with high inflation were onion (116.22 per cent), garlic (60.74 per cent), silver jewellery (52.39 per cent), ginger (48.32 per cent) and lemon (47.30 per cent). This is the first time in two years that retail inflation has breached the RBI’s upper tolerance band of 6 per cent.
The central bank is mandated to keep inflation within the range of 2-6 per cent. In October 2024, retail inflation was 6.25 per cent.